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Distrainors will be selected randomly

Parliament adopted new rules for distrainment proceedings and personal bankruptcies to make the system more effective.

Justice Minister Lucia Žitňanská(Source: TASR)

Distrainors may expect big changes as of next April as parliament adopted an amendment to the execution procedure on November 29.

Justice Minister Lucia Žitňanská (Most-Híd) hopes the new rules will be fair towards debtors and will make the whole process more effective.

“There are 3.6 million distrainment files at courts at the moment,” Žitňanská said, as quoted by the SITA newswire. “A big portion of them are only waiting [to be discussed].”

Such files may be stuck at courts for even 15 years, she added.

Under the new rules it will no longer be possible for those claiming debt recovery to pick the specific distrainor. They will be chosen randomly by the computer, the Denník N daily reported.

Random selection will secure greater independence of distrainors and curb the space for corruption, nepotism and unacceptable dictating of big creditors, according to the Slovak Chamber of Executors (SKE). As a result, the whole distrainment proceeding will be cheaper, as reported by Denník N.

The Slovak Banking Association (SBA), on the other hand, points to the potential risks of random selection, particularly regarding the even redistribution of cases. There is a large number of executor offices with various personnel and technical capacities.

“This may cause that the commenting executor offices will have to deal with the distrainment of big companies even though they will have no or minimal experience with solving such cases,” Marcel Laznia of SBA told Denník N.

Another change stipulates that if the distrainor fails to recover the debt from a person in five years, the proceeding may be halted. In case of corporate entities the deadline was set to 2.5 years. This, however, will not mean the old cases will disappear from the courts, but that the judges will have to finish them under the old rules, Denník N wrote.

In addition, the costs of distrainment proceedings will be capped. The change made it to the amendment via a proposal of Peter Pčolinský, MP for the We Are Family party, who claimed that the bonuses for distrainors should not exceed the demanded sum in case of low-cost items.

Under the new rules, the distrainor will receive only a certain percentage of the claimed sum, SITA reported.

The SKE however disagrees with the change, saying that it may endanger the operation of several executor offices as most of them are financed only from rewards they get, the Denník N wrote.

Moreover, the parliament also adopted the amending proposal of Smer MP Jana Laššáková who proposed to stop the increase in costs in case the court distrainor is excluded from the proceeding, SITA wrote.

Though the new rules will become effective already in February 2017, the executor offices will have to prepare for months for the new rules. This will also include electronic communication. If they fail to do so, they will not be allowed to join the system. This is one of the measures to accelerate the whole proceeding, Denník N wrote.

Personal bankruptcy more available

The amendment to the execution procedure also introduces new rules for personal bankruptcy. They stipulate that people willing to announce it will no longer be required to claim they are insolvent. They will only have to say that they face distrainment proceeding.

Moreover, the elimination of their debts will cost €500 instead of current €650. Those not having the sum will be able to lend it from the Legal Aid Centre, the Denník N wrote.

Among the new rules is also the principle that if people lose their flat during the debt elimination process, they will receive a sum from which they will be able to pay for new accommodation.

Žitňanská sees the new rules as a chance for those stuck in a debt trap.

Though the SBA warns of abusing the system, the minister claims the law contains measures to prevent it.

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